Public Disclosure Authorized 2019 Public Disclosure Authorized Emerging Risks in the EU – The Insurance Market Public Disclosure Authorized BACKGROUND INFORMATION AND DATA Public Disclosure Authorized FINANCE, COMPETITIVENESS & INNOVATION | EUROPE AND CENTRAL ASIA REGION Contents1 EUROPEAN SUPERVISORY BODIES ................................................................................................................ 2 European Insurance and Occupational Pensions Authority (EIOPA) ........................................................ 2 European Systemic Risk Board (ESRB) ...................................................................................................... 2 SUPERVISION AT THE EU LEVEL .................................................................................................................... 3 Insolvency ................................................................................................................................................. 4 Insurance Guarantee Schemes ................................................................................................................. 5 INSURANCE ASSOCIATIONS .......................................................................................................................... 6 International Association of Insurance Supervisors (IAIS) ........................................................................ 6 International Bureau of Assurance and Reassurances (BIPAR) ................................................................ 6 Global Federation of Insurance Associations (GFIA) ................................................................................. 6 Insurance Europe ...................................................................................................................................... 7 Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE) ..................................... 7 COUNTRY STUDIES ........................................................................................................................................ 7 Bulgaria ..................................................................................................................................................... 7 Romania .................................................................................................................................................. 16 Croatia ..................................................................................................................................................... 24 Poland ..................................................................................................................................................... 34 Italy ......................................................................................................................................................... 42 Spain ........................................................................................................................................................ 52 Portugal ................................................................................................................................................... 63 Greece ..................................................................................................................................................... 72 REFERENCES ................................................................................................................................................ 79 1 This document provides background information and data for the presentation “Emerging Risks in the EU – The Insurance Market”. The information presented in this document is for internal use only. 1 EUROPEAN SUPERVISORY BODIES There are two key supervisory bodies responsible for monitoring insurance activities within the EU, both of which created in 2010 as part of a new EU-level supervisory structure. These bodies are EIOPA and ESRB. European Insurance and Occupational Pensions Authority (EIOPA) The European Insurance and Occupational Pensions Authority (EIOPA) is a financial regulatory institution that replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). It was established in consequence of the reforms to the structure of supervision of the financial sector in the European Union. This reform was initiated by the European Commission. Before and during the financial crisis in 2007 and 2008, the European Parliament has called for a move towards more integrated European supervision in order to ensure a true level playing field for all actors at the level of the European Union and to reflect the increasing integration of financial markets. As a result, the supervisory framework was strengthened to reduce risk and severity of future financial crises. EIOPA is part of a European System of Financial Supervisors that comprises three European Supervisory Authorities, one for the banking sector, one for the securities sector and one for the insurance and occupational pensions sector, as well as the European Systemic Risk Board. The objective of EIOPA is to protect the public interest. Among its tasks in the field of insurance is to contribute to the establishment of high-quality common regulatory and supervisory standards and practices in the European Union. EIOPA's powers include issuing guidelines and recommendations and developing draft regulatory and implementing technical standards. EIOPA is also entitled to provide opinions to the European Parliament, the Council of the European Union and the European Commission on insurance related issues. One of the main aims of EIOPA for the coming years is the preparation of the new supervisory regime for insurance and reinsurance undertakings and particularly the conduct of all the necessary work for the implementation of the EU Directive on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II). EIOPA is also advising the European Commission on the revision of the Insurance Mediation Directive and will support the development of industry training standards in this area. In this respect, EIOPA is working on the development of common disclosure rules, and regulation of the sale of Packaged Retail Investment Products (PRIPs). EIOPA also provides input into the European Commission's policy-making with regards to Insurance Guarantee Schemes (IGS) with a view to contributing to the assessment of the need for a European network of national Insurance Guarantee Schemes which is adequately funded and sufficiently harmonized. European Systemic Risk Board (ESRB) The ESRB monitors high-level risks to the EU financial system and issues warnings and recommendations. It has no binding powers but was conceived as a “reputational body” whose prestige should be sufficient to ensure that its opinions and decisions influence supervisors and policymakers. 2 SUPERVISION AT THE EU LEVEL Following recommendations made by the Committee on Economic and Monetary Affairs on a stronger European supervisory structure and as a reaction to the global financial crisis that began in 2008, the European Parliament called for major changes to be made to the supervision of financial services. As a result, the European System of Financial Supervision (ESFS) came into operation on 1 January 2011. The ESFS is made up of the European Systemic Risk Board (ESRB), the European Insurance and Occupational Pensions Authority (EIOPA), the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and national supervisors of the EU member states. The purpose of the ESRB is to monitor high-level risks to the EU financial system and issue warnings and recommendations. It has no binding powers but operates with the logistical and administrative support of the European Central Bank (ECB). It was conceived as a “reputational body” whose prestige should be sufficient to ensure that its opinions and decisions will influence supervisors and policymakers. The ESRB is currently chaired by the head of the ECB. Micro-prudential supervision is the responsibility of the European Supervisory Authorities: EIOPA, EBA and ESMA. Among other things, they draft regulatory technical standards and implement technical standards which are adopted by the European Commission (as delegated or implementing acts) and issue guidelines and recommendations. The Solvency II directive has as its objective the harmonization of the regulatory framework in member states and the creation of a prudential supervision regime that affords maximum protection to policyholders. The main provisions of the legislation include the establishment of a common set of procedures for the authorization and supervision of (re)insurance undertakings in member states, the attribution to the competent authorities of the home member state of responsibility for the financial supervision of those undertakings, including the business written through branches and by way of freedom to provide services, and the obligation of member states to ensure that supervisory authorities have the necessary means and powers to carry out the supervision and enforce the law.2 Group 2 Article 30 of the Solvency II directive establishes that the financial supervision of (re)insurance undertakings, including that of the business they pursue either through branches or under the freedom to provide services, shall be the sole responsibility of the home Member State. Financial supervision shall include verification, with respect to the entire